Monero Faces Multi-Year Resistance as Technicals Scream Sell

Monero Faces Multi-Year Resistance as Technicals Scream Sell

October 8, 2020

Key Takeaways

  • Monero is up nearly 55% since the beginning of September.
  • Despite the substantial gains incurred, the uptrend is getting exhausted.
  • A spike in selling pressure around the current price levels could see XMR drop towards $90.

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Monero was one of the few cryptocurrencies that have been able to shrug off last month’s sell-off and advance to new yearly highs. On-chain data now suggests that the privacy coin’s time has finally come.

The Infamous Multi-Year Resistance Trendline

Monero entered an impressive bull rally after taking a 24% nosedive at the beginning of September. The privacy-centric cryptocurrency was able to recover all the losses and move even higher shortly after, however.

The token surged nearly 55%, going from a low of $74 on Sept. 5 to recently hit a new yearly high of $114.

The upswing led to the retest of a critical resistance barrier that has been able to contain XMR from advancing further. Each time Monero has risen to the range between $115 and $122 since 2018, it has been rejected and suffered a steep correction.

Although many analysts could argue that this multi-year hurdle is weakening over time, this level is nonetheless keeping prices at bay. What’s more, the recent retest may lead to a significant downswing yet again.

Monero Flashes Multiple Sell Signals

Indeed, the TD sequential indicator is currently presenting a sell signal on XMR’s 3-day chart. The bearish formation developed in the form of a green nine candlestick.

A spike in selling pressure around the current price levels may help validate the pessimistic outlook, resulting in a one to four 3-day candlesticks correction.

The lower time frames also add credence to this bearish scenario.

For instance, Monero’s recent price action appears to have formed an ascending triangle on the hourly chart. A horizontal line was created along with the swing highs while a rising trendline developed along with the swing lows.

If sell orders begin to pile up, XMR would likely break below the hypothenuse of the ascending triangle. Under such circumstances, the downswing could trigger a further sell-off among investors that pushes this altcoin to $90 or lower.

This target is determined by measuring the distance between the two highest points of the triangle and adding it to the breakout point.

Nonetheless, a significant spike in demand for XMR might allow it to finally break above the overhead resistance, igniting a state FOMO among investors. If this were to happen, the 15th token by market cap could rise towards $134, based on the technical pattern shown above.

Given the pivotal point in which Monero sits, it’s imperative to wait for a clear break of support or resistance before entering any trade.

A dose of patience could play a significant role in benefiting from this cryptocurrency’s next major price movement.

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